S&P changes India outlook to `positive'
Mumbai: International rating agency Standard & Poor's Ratings Services even while revising the outlook on India from stable to positive has affirmed the sovereign long-term rating at `BB+' and short term rating at `B' — both below investment grade. The change in the outlook on the country may be followed by a revision in the sovereign rating in the future, the agency indicated. This could help Indian corporates raise foreign loans at lower cost.

The agency has also revised the outlook on some Indian corporates.

S&P said that the central and state governments have increased efforts to rein in their budget deficits. The Union Budget 2006-07 puts fiscal consolidation back on track, while the assessment on state governments comes in the wake of better-than-expected fiscal outlook.

The government deficit is expected to fall below 8 per cent of GDP from 10 per cent in 2002.

S&P said India's contingent liabilities are also high. The Government-guaranteed debt alone amounts to 9 per cent of 2006 GDP, and State-owned enterprises are generally inefficient. The chaos in banking operations during the recent strike at the State Bank of India, the country's largest commercial bank, and the unreliability of power supply also illustrate a still-developing operating environment, including the payment system, and the challenges remaining in effective administration and reforms for the labour market and public sector.

Moody's Investors Service has placed India's sovereign at Baa3, or the lowest investment grade.
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DoT embarks on Rs 1,000-cr optical fibre cable project
New Delhi: The Department of Telecom has started work on a Rs 1,000-crore optical fibre cable project to enable the defence forces to vacate spectrum for use by commercial cellular service providers. The project that will free 45 Mhz of radio frequency for cellular usage includes laying an exclusive optical fibre cable network for the armed forces, linking crucial establishments across the country, which will enable it to shift part of its communication from the existing wireless mode to a wire line network.

J.S. Sarma, chairman, Telecom Commission, at the Telecom Conference 2006 organised by the Associated Chambers of Commerce and Industry of India said BSNL would execute the project and the spectrum released would be allocated to operators for offering the existing mobile services as well as 3G (next generation mobile services) services.

The Army is not too happy vacating the radio frequency. Col Bonny Mathew, Deputy Head, JCES, Ministry of Defence, said it would put the armed forces at a disadvantage if it did not get spectrum to operate its communication links.
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Nabard increases credit support in AP
Hyderabad: Nabard's (National Bank for Agriculture and Rural Development) credit support to Andhra Pradesh has gone up to Rs 4,798.52 crore during 2005-06, a growth of 37.85 per cent over the previous year's figure. The financial support during 2005-06 included Rs 2,103 crore as production credit support to banks, Rs 751.71 crore as investment credit support to banks and Rs 1,367.57 crore as RIDF (Rural Infrastructure Development Fund). The bank gave Rs 576.32 crore to rural banks and cooperatives for liquidity refinance needs.

According to a Nabard press release, the RIDF loans at Rs 1,367.57 crore were the highest in the country, forming 16 per cent of the total sanctions under the scheme while the cumulative sanctions and disbursements under the RIDF scheme in the State were Rs 7,383.26 crore and Rs 4,266.80 crore respectively.
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